It’s nice to see government subsidies of the arts, and in an era of widespread government paranoia of video games and their effect on minors, even nicer to see government subsidies of gaming. So kudos to the Canucks: Canadian government funding is now being pumped out to fund the development of indie games.

So which ones? Telefilm Canada, the nation’s federal cultural industry agency, has pumped money into Hothead Games’ brilliantly titled DeathSpank, which is the latest project from Monkey Island creator, Ron Gilbert, and has been described as “Monkey Island meets Diablo…” which just about sounds like the best game ever. Telefilm awarded Hothead Games an impressive $536,069.

The other recent winner was Polytron’s IGF prize-winner 2D/3D platformer, Fez. Fez won $73,682 from the agency, and is due out for Xbox Live Arcade in 2010.

The grants aren’t just gift money, though. Canada expects a chunk of change back, and developers are expected to repay the grants out of their games’ profits. You can lessen your financial obligation, though, by paying service to the ornery Quebecois and including both English and French language options in the game, which will reduce the payback by ten percent.

Overall, though, it seems like an excellent system to encourage game developers to come to Canada. A refreshing perspective, even as countries like Germany are all but trying to force their native game developers out. Again, kudos to the Canucks, especially for their taste in which games to fund: Fez and Deathspank are games after my own heart.